Definition: Unemployment benefit

Category: EU-SILC

Unemployment benefits refer to benefits that replace in whole or in part income lost by a worker due to the loss of gainful employment, provide a subsistence (or better) income to persons entering or re-entering the labour market, compensate for the loss of earnings due to partial unemployment, replace in whole or in part income lost by an older worker who retires from gainful employment before the legal retirement age because of job reductions for economic reasons, contribute to the cost of training or re-training people looking for employment, or help unemployed persons meet the cost of travelling or relocating to obtain employment.

It includes:
- full unemployment benefits: benefits compensating for loss of earnings where a person is capable of working and available for work but is unable to find suitable employment, including persons who had not previously been employed,
- partial unemployment benefits: benefits compensating for the loss of wages or salary due to formal short-time working arrangements, and/or intermittent work schedules, irrespective of their cause (business recession or slow-down, breakdown of equipment, climatic conditions, accidents and so on), and where the employer/employee relationship continues,
- early retirement for labour-market reasons: periodic payments to older workers who retire before reaching standard retirement age due to unemployment or to job reductions caused by economic measures such as the restructuring of an industrial sector or of a business enterprise. These payments normally cease when the beneficiary becomes entitled to an old-age pension,
- vocational training allowance: payments by social security funds or public agencies to targeted groups of persons in the labour force who take part in training schemes intended to develop their potential for employment,
- mobility and resettlement: payments by social security funds or public agencies to unemployed persons to encourage them to move to another locality or change their occupation in order to seek or to obtain work,
- severance and termination payments (benefits compensating employees for employment ending before the employee has reached the normal retirement age for that job),
- redundancy compensation: capital sums paid to employees who have been dismissed through no fault of their own by an enterprise that is ceasing or cutting down its activities,
- other cash benefits: other financial assistance, particularly payments to the long-term unemployed.

It does not include:

- family allowances paid for dependent children (which are included under "Family/children-related allowances" (HY050G)). http://ec.europa.eu/eur-lex/pri/en/oj/dat/2003/l_298/l_29820031117en00010022.pdf